Policy —

“You could be liable for $150k in penalties—settle instead for $20 per song”

Growing copyright cop Rightscorp hopes to be a profitable alternative to "six strikes."

A not-so-subtle threat

Without ISPs going along with its program, Rightscorp doesn't have a business. Of course, US ISPs are already in the process of creating a system that deals with repeat infringers. The "six strikes" system run by the Center for Copyright Information has just released the first major report on its activity, revealing that 1.3 million copyright notices were sent out under that system.

Rightscorp's financial filings suggest it believes that system won't be sufficient. "Graduated-response style interdiction is too costly to scale to any significant portion of total infringements and yields little or no results," the company stated in its annual financial statement. "ISPs have no incentive to participate in any meaningful way without copyright holders sending them notices."

The company relies on the threat of a lawsuit, but that seems unlikely to materialize. The "six strikes" regime itself suggests that ISPs and most entertainment companies are interested in détente, not brinksmanship.

Perhaps more important, as stated above, Rightscorp's interpretation of what the DMCA requires is open to debate. The law does require terminating the accounts of "repeat infringers," but there's a lot of leeway in how that might get done. Even the seemingly simple question of what constitutes a repeat infringer is open to interpretation.

So ISPs have to "adopt and reasonably implement" a policy for terminating accounts of repeat infringers. But the statute doesn't detail how that has to be done, explained Jonathan Band, a technology policy lawyer who helped draft parts of the DMCA.

"It could be you have in place a system of forwarding notices, or you could have something else," said Band. "You could just wait for three strikes and then terminate the account, although from a customer relations point of view that wouldn't be the smartest thing to do." Some universities that provide Internet service will terminate it after just one "strike," he noted.

The bigger question is, who's a repeat infringer?

"Do they have to be adjudicated as infringers [by a court]?" asked Band. "Or is it enough for there to be a claim of infringement? That's a big difference."

It's a big enough gap that copyright owners, for the most part, have decided not to gamble with high-stakes courtroom combat against ISPs.On the one hand, if a copyright holder beat down an ISP, entertainment companies could compel Internet providers to be tougher on infringing users. But if they lost, they could be in a worse situation, with ISPs taking an even more hands off approach.

It's also reasonable to assume that big ISPs wouldn't likely back down without a fight. Terminating a user account on a free website like YouTube is one thing; forcing out a subscriber who may be paying more than $150 each month for a bundle of TV and Internet service is quite another. A court ruling that leaned even slightly in the direction of compelling punishment of those high-value subscribers would get the full attention of ISP legal departments and budgets.

A decade-old precedent

The most relevant courtroom battle is from 2003: the RIAA v. Verizon case that went up to the DC Circuit Court of Appeals. In it, record companies sought to compel Verizon to reveal the identity of a subscriber allegedly using the now defunct KaZaA file-sharing software. The record companies won initially, but the appeals court sided with Verizon, finding that the DMCA didn't require it to comply with the RIAA's subpoena.

While that case certainly doesn't suggest a lawsuit would be an easy win for a copyright owner, it also doesn't rule out the possibility. If a court bought into Rightscorp's argument that its body of evidence was uniquely convincing, it could hold an unresponsive ISP liable. If a court was convinced that a service provider was unresponsive in the face of clear evidence of infringement, it could be held liable.

"If there are a bunch of notices about someone being an infringer, that could be enough to trigger the obligation to do something about their account," said Band. "If [copyright owners] say, 'We sent you three notices that this guy was a bad guy, and you didn't do anything,' then they could argue that whatever policy you had wasn't a good policy."

RIAA v. Verizon is more than a decade old now, and it's telling that there aren't more examples of copyright holders pushing courts to detail ISP obligations in terms of protecting copyrights. In a way, the "six strikes" system that's now going into effect is a compromise, born of the fact that neither side has an incentive to push this issue to a final decision. There's no crystal clear answer.

Future ambitions

That murky legal landscape hasn't stopped both ISPs and content industries from thriving. Yet it's also made room for one attempt after another at leveraging copyright law into for-profit Internet policing schemes. Rightscorp is merely the latest incarnation.

In the future, the company hopes to get more ISPs to comply—and it will expect more of those that are already cooperating, said Steele. Ultimately, Rightscorp is hoping for a scenario in which the repeat infringers it identifies aren't just notified by e-mail. Instead, Steele hopes to see those users re-directed to a Rightscorp notice right at the moment they open their Web browsers.

"You wouldn't be able to get around the re-direct page, and you'd have to pay a fine to return to browsing," he explained. The company is in discussions with four ISPs about imposing such a re-direct page, according to Steele. But the details about which ISPs cooperate with Rightscorp, and how much they cooperate, is a secret that the company guards closely.

The reality is, Rightscorp is a tiny company seeking to change the behavior of industry behemoths like Comcast and Verizon. And while it seeks to wield a "big stick" in the form of a potential copyright lawsuit, at the end of the day, it's the company's music industry customers who would have to take such a bold step.

In the meantime, Steele doesn't want his company to appear antagonistic. Instead, he paints an optimistic picture that more ISPs will be coming to his side voluntarily.

"Every month we get more ISPs that are forwarding the notices," he said. "It's a unique business model, but it works. We believe five years from now, worldwide, this is how file sharing will be remediated. And we'll be the company that does it, around the world."